Last Friday I had dinner with friends. Many of them are entrepreneurs and/or have major creative side endeavors. One of my friends, Sam, was excited to share that she had created an LLC for her new business. We were all happy for her to strike out on her own. I asked her how long it took to get the approval back from the Arizona Corporation Commission.
“Five days. I had it expedited because I didn’t want to wait,” she said.
Then it struck me – no one tells entrepreneurs that they don’t have to wait to get their LLC approved by the Arizona Corporation Commission before they can open their doors. Unless you’ve taken a class on business formation, you don’t know that you’re are allowed to call your business an LLC and conduct business as an LLC as soon as your file the paperwork and pay the fee. My friend paid an extra $35 for expedited filing because she thought her hands were tied until she her business had been approved. I bet a lot of people make the same mistake because it’s a logical assumption.
One of the first things I did when I opened this firm was file an application for a PLLC. It took almost six weeks to get the letter from the State saying that the Articles of Organization for my business were approved. While I waited for my approval, I opened bank accounts, purchased software and equipment, created a website, filed my application for trade name protection, and entered into contracts as a PLLC. All of those activities were completely legitimate. I kept a copy of my PLLC application in case anyone needed proof that I had filed it.
So what’s the take-home lesson? For most people, you can save yourself $35, file a regular LLC application, and conduct your business as an LLC once you’ve sent in your LLC application and fee. Don’t wait for approval from the Arizona Corporation Commission to get your business up and running.